discount stock program

[LS21]

we have a discount stock program, wherein employees can buy stocks at 7.5% discount and immediately exercise the option

there are 2 purchasing periods with 3 pricepoints: January-June, June-December

For example, stock price is 90$ in January, and will be 60$ in June

in June, employees purchase stocks at 92.5% of highest price... which is 60$.. which is 55.5$, which can be (theoretically) immediately sold back at 60$

aside from the fact that the gains will be taxed higher because of short-term holding, the net gain is still healthier than any other option out there. is there a reason NOT to put more money into this?

 

[rsd]

Assuming you are doing Next Day sale, there is virtually no risk to it. You're basically guaranteed a minimum of a 7.5% return (minus tax). At my company we get a 15% discount.

 

[spidey07]

Normally you don't want much of your holdings in your employer. Probably 10% max. The big problem with it is if the company does really bad then not only do you lose your job, you lose a lot in the stock as well. Double whammy.

But if you can turn it around in the same day just consider it as extra income from selling it, it will be taxed at your normal rate. Or if you know something, buy and hold.

 

[rh71]

have had a 15% discount and now 5%. Haven't made a ton of money on this the past 9 years but it's a good way to save for me. Very stable track record so I persist... I don't play the market at all otherwise.

 

[LS21]

nm, they locked contribution % at the enrollment period ... im stuck anyway

 

[TuxDave]

If you don't want to hold any investments, just quicksale all the time and maximize the amount you can put into it. It's free money.